There is a growing interest in investing in asset classes like stock or Bitcoin to create wealth. These investment portfolios have become popular across the world due to their potential for huge returns. But while crypto trading has gained traction as one of the best ways to make money online in Nigeria, you may need to also consider some Nigerian stocks with high dividends. Hence, this article highlights the best-performing stocks on the Nigerian Stock Exchange.
An Overview Of Dividend Yields
A dividend yield is a financial ratio showing the value of dividends a company pays out yearly in line with its stock price. This is usually calculated by dividing the annual dividends per share by the current stock price, which is expressed in percentages.
The dividend yield is crucial to investors because it shows the real-time income that will be accrued from an investment compared to its market price. As such, a higher yield indicates a higher return on investment (ROI) from dividends without capital gains.
Notably, about 58 companies listed on the Nigerian Stock Exchange (NGX) distributed over N1.5 trillion in dividends for the financial year (FY) ended 2023. Dangote Cement Plc is leading the list with a total dividend distribution of about N511 billion, and Airtel Africa Plc follows closely with N276 billion.
However, this article focuses on the share price of the stocks on their ex-dividend date (ex-div), which is the last share price of a stock before its adjustment for dividends.
Top Nigerian Stocks With High Dividends
1. Smart Products Plc – 40.00%
Smart Products Plc is a construction and real estate company. While it is the smallest stock on the NGX, it had the highest dividend yield of 40% for 2023. This company distributed a dividend of 8.00 kobo per share, with its share at 20 kobo as of the ex-dividend date in June 2024.
This company recorded a net income of N6.58 million and distributed a dividend of N3.6 million for the financial year of 2023 – giving a dividend payout ratio of 54.7%.
2. SFS REIT – 14.31%
SFS Real Estate Investment Trust is a closed-ended real estate investment trust scheme in Nigeria which pools funds for the primary purpose of investing in real estate. REIT distributed a dividend of N14.5 per share for 2023, with its share price at N101 as of the ex-dividend date of April 2024.
Therefore, the stock’s dividend yield was 14.31% as it accrued a net income of N317.5 million in the financial year of 2023. As the total dividend distribution of SFS REIT was N290 million, the company paid out 91.3% of its net income as dividends for the year.
3. Zenith Bank Plc – 12.27%
Zenith Bank is one of the leading commercial banks in Nigeria, offering a wide range of financial services. The bank had the best dividend yield among banking stocks for the financial year of 2023. It distributed a total dividend of N3 per share, with an interim dividend of 5 kobo and a final dividend of N3.5.
The bank’s share was N33 as of April 2024, giving a dividend yield of 12.27%. Zenith Bank Plc recorded the highest net income in Nigeria in 2023, with a staggering N676.6 billion. The bank had a dividend payout ratio of 18.6%, with a dividend distribution of N124.6 billion.
4. United Bank for Africa (UBA) – 11.89%
The UBA Plc is another commercial bank on this list of top Nigerian stocks with high dividends. The company distributed a total dividend of N2.8 per share, with an interim dividend of 5 kobo and a final dividend of N2.3.
This stock generated a dividend yield of 11.89% as its share price was at N24 as of the ex-dividend date of May 2024. UBA Plc recorded a net income of N607.7 billion for the financial year of 2023 and paid N95.8 billion in total dividends. This represents a payout ratio of 15.8% of the net income.
5. Presco Plc – 9.84%
Presco Plc is an oil palm company that specializes in the cultivation and processing of oil palms for finished products. The company distributed a total dividend of N26.3 per share, covering an interim dividend of N2 and a final dividend of N24.3.
This stock generated a dividend yield of 9.84% for the financial year of 2023, as its share price was at N267 as of the ex-dividend date of May 2024. Presco Plc distributed N26.3 billion in dividends from the N32.7 billion net income it generated in 2023, representing a dividend payout ratio of 80.5%.
6. GTCO Holdings – 9.79%
GTCO Holdings is the parent company of Guaranty Trust (GT) Bank. The company distributed N3.2 per share as total dividends for the financial year 2023, featuring an interim dividend of 5 kobo and a final dividend of N2.7.
This company’s share price was at N33 as of April 29, representing a 9.79% dividend yield. GTCO Holdings generated a net income of N539.7 billion in 2023, and N94.2 billion of it was distributed as a dividend.
7. UPDC REIT – 9.65%
UPDC Real Estate Investment Trust (REIT) is a real estate investment trust that invests in Nigeria’s property market. The company distributed 41 kobo per share in total dividends for 2023, with 19 kobo as an interim dividend and 22 kobo as a final dividend.
This stock had a dividend yield of 9,65%, with its share price at N4 as of May 2024. UPDC REIT recorded a net income of N3.8 billion in 2023 and paid out N1.09 billion in total dividends, representing a payout ratio of 28.8%.
8. Access Holdings Plc – 9.33%
Access Holdings Plc is the parent group of Access Bank and other subsidiaries. The company distributed a total dividend of N2.1 per share, with a 30 kobo interim dividend and an N1.80 final dividend.
This stock generated a dividend yield of 9.33% for the financial year of 2023, as its share price was at N23 as of the ex-dividend date of April 2024. Access Holdings Plc generated a net income of N619.3 billion and used 12.1% of it to pay a total dividend of N74.6 billion.
9. Fidelity Bank Plc – 9.24%
Fidelity Bank is a Nigerian commercial bank that distributed a total dividend of 85 kobo per share, featuring a 25 kobo interim dividend and 60 kobo final dividend for the financial year of 2023. The company offers a dividend yield of 9.24%, with its share price at N9 as of the ex-dividend date of April 2024.
The stock accrued a net income of N99.45 billion in 2023 and distributed a total dividend of N27.2 billion, representing a dividend payout ratio of 27.4%. This is the second highest among banking stocks.
10. Custodian Investment Plc – 8.56%
Custodian Investment Plc has significant holdings in companies and brands, including Custodian and Allied Insurance Limited. This company distributed a total dividend of N8 per share for 2023, with a 15 kobo interim dividend and 65 kobo final dividend.
The company’s share price was at N9 as of the ex-dividend date of June 2024. Custodian Investment Plc recorded a net income of N21 billion, and N5.9 billion was used to distribute a total dividend of N5.9 billion.
Frequently Asked Questions (FAQs) About Nigerian Stocks With High Dividends
What Is The Stock With The Highest Dividends In Nigeria?
Some stocks with the highest dividends in Nigeria are from companies like Zenith Bank, SFS REIT, Smart Products Plc, UBA, etc. These companies have dividend yields as high as 20% to 40%.
How Do I Invest In Dividend Stocks In Nigeria?
Start by researching reputable Nigerian companies that are reputable for consistent dividend payouts. You must open a brokerage account with a trusted firm offering Nigerian stock access. Deposit funds into your account and choose dividend-paying stocks based on factors such as dividend yield and the company’s financial stability.
Is It Safe To Invest In Stocks In Nigeria?
It is safe to invest in stocks in Nigeria, considering you put your money where your mouth is. This means that you must understand the stock and the company you are investing in, in terms of short and long-term viability, to ensure the safety of your funds.
Conclusion
Stocks are a way to grow wealth, which is considered a passive source of income. You can invest in many stocks in Nigeria with high dividends, some of which we have highlighted in this article. However, it is essential to study and probably consult a professional to guide you on the investment journey.
